We were first acquainted with LPL Financial (LPLA) back in 2003 when we saw an LPL producer at our local bank.  LPL was formed in 1989 by the merger of Boston-based brokerage firm Linsco with San Diego, CA based broker Private Ledger Financial Services group.  The new company took the name Linsco/Private Ledger and changed its name to LPL Financial in 2008.  LPL sold 60% of itself to the private equity firms Hellman & Friedman LLC and Texas Pacific Group in 2005 and under the terms of the definitive agreement, LPL had been valued at $2.5B.   Todd Robinson, a former Smith Barney broker, had purchased Linsco in 1985 four years later merged Linsco with Private Ledger to form Linsco/Private Ledger.  LPL sought to establish itself as an independent alternative to larger Wall Street wire house brokerages.  LPL enjoyed solid organic growth, which was bolstered by the following brokerage and investment advisory acquisitions:

  • Private Trust Company, 2003
  • The retail brokerage operations of The Phoenix Companies, Inc (PNX) which consisted of WS Griffith and Main Street Management Company
  • UVEST Financial Services Group, January 2nd, 2007 $89.45M consisting of $10M in stock and the balance in cash
  • Pacific Select Group LLC from Pacific Life, June 20th, 2007 $120.5M in cash and stock
  • Independent Financial Marketing Group Inc., November 7th, 2007 $25.7M in cash (acquired from Sun Life Financial (SLF)
  • National Retirement Partners Inc., July 14th, 2010 $17.2M in cash
  • Concord Capital Partners, June 22nd, 2011; $20M in cash
  • Fortigent Holdings, April 23rd, 2012; $38.8M in cash
  • Veritat Advisors Inc, July 10th, 2012 $5.1M in cash with $14.9M in contingent compensation

 
Sources: LPL’s 2007-2011 Annual Reports and Saibus Research’s Estimates

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